The combination of ever-escalating insolvency and intransigence in Sacramento reinforces my conviction that this fiasco we call a budget process will climax with federal intervention. Today's revelation of a federal threat to seize control of the state parks if Sacramento tries to close them is but the first step in what will ultimately be an Obama usurpation of much of state government.
The G.O.P. will not yield on taxes and the Dems will not yield on spending. With the State Capitol degenerating into The Western Front circa 1916, California's economy will sag further, keeping the rest of the nation securely anchored to the ocean floor of recession. This, Obama cannot have. With the rising tide of national joblessness likely to crest at 10% this Friday, Obamanon will be under the gun to produce real recovery, or a reasonable facsimile thereof, in time for The Fall Classic, a mere sixteen months away. In short, a California that is utterly dead in the economic water plays all sorts of hell with his entire agenda, indeed, his very political survival.
I suspect that Obama will allow the trench warfare of California state politics to persist for another two weeks, three at the most. If there is no resolution at that time, he will direct Geithner to open the federal cash spigots in the direction of The Golden State.
But what about all of the other states with budget woes of their own? Won't they have a plausible case for similar federal munificence? Sure, but they won't get any.
How will Obama and Geithner get around that sticky political thicket? Easy. They'll construct a public fiction that all sorts of onerous conditions are attached to California's bailout, and that California will have to pay a steep political and economic price for accepting such federal aid. The effect will be to make California's acceptance of federal aid appear to be a most unappetizing option for other states, without ever really imposing any substantive penalties on The Golden State. A major bit of sleight of hand? Sure, but greater cons have been contrived in far more desperate circumstances.
The Feds are coming...I'm calling it right now...I'm nominating myself for The Nostradamus Award, right here and now.
